7 ms·

Why Facebook should worry about Tencent

61 points by arnauddri 13y ago

arnauddri 13y ago
Asia is a region which has proven its ability to innovate in the messaging space and the internet as a whole. I believe Rakuten and Alibaba (through their investment in Tango and Viber) along with Tencent are now ready to compete with US juggernauts like FB
- yiedyie 13y ago
  Facebook peaked they should be worried about everything.
  - arnauddri 13y ago
    agreed - they're venturing into the hardware business with Oculus, something very few companies managed to do properly
- w1ntermute 13y ago
  I don't think that Asia has proven its ability to innovate in the internet/messaging space. It's that significant cultural, language, and (in the case of China) legal barriers make it hard for Western companies to compete there. But at the same time, almost none of these companies have shown the potential to expand outside of Asia, and the vast majority of them have not even been able to expand out of their home countries. Rakuten has tried to grow in the US market using its purchase of Buy.com, but that's not working, partly due to a disastrous rebranding. They also had a failed venture in China. So Viber may be successful if they just leave it alone, but trying to use it to make Rakuten better known in the West would be a horrible idea. Naver (Korean) has the Japanese messaging service LINE (which was created by some of its Japanese employees at its Japanese subsidiary), but can't gain any other ground. And I definitely can't see the Chinese internet companies becoming successful in Japan or South Korea, given their penchant for censorship and nationalistic differences.
  - arnauddri 13y ago
    Your point on Rakuten is fair. However I believe Chinese companies have a strong edge regarding the messaging market. Chinese users are much more early adopters when it comes to messaging apps which enable Alibaba or Tencent to test new ideas much faster. Now that competition is getting fierce in China, they are expanding aggressively elsewhere and thus bring their deep expertise in the messaging market to the US. Tango's CTO Eric Setton just got $250M from Alibaba praised this strategic move saying that tapping into Alibaba will “bring a crystal ball into (their) boardroom… Asia has insight that is around a year ahead of the West right now” (http://thenextweb.com/mobile/2014/03/20/chat-app-tango-raises-a-280m-mega-round-led-by-alibaba-as-it-reaches-70m-active-users/ http://thenextweb.com/mobile/2014/03/20/chat-app-tango-raise...)
    - adventured 13y ago
      Saying things like: "Asia has insight that is around a year ahead of the west" does not actually make it so. That sounds like nothing more than empty talk. What stunning software products / innovations / market leaders came out of Asia in the last decade that didn't exist in the West or Silicon Valley either beforehand or at roughly the same time?
  - danford 13y ago
    Of course it could just be that it's just hard to have a globally successful app, but consider the following: China has their own social networks and messaging apps because they're sponsored (openly or behind closed doors) by the state. The reason they allow their citizens to use these apps is because these particular ones are being used to intercept intelligence data, and are not controlled by western entities. Does the chinese government have a hook in face book? If they did, would they want the US intelligence agencies who are undoubtedly closer to FB to have access to their citizens data? Probably not. Just as Chinese intelligence agencies control the net over there, US and western intelligence agencies control the internet over here, but in a much more secretive way as we've seen with the recent snowden leaks. The reason Chinese services aren't successful in the west is because the powers that be don't want them to be successful, because then the west wouldn't have the proper hooks in the Chinese social networks which are undoubtedly used for mass spying.
malanj 13y ago
As a South African I find the global indifference to Tencent quite strange. They are massive but mostly ignored (compared to e.g. Amazon which has a similar market cap). Tencent are aggressively expanding WeChat into Africa (big billboards everywhere!). They are also running a local development team in South Africa to customise the app for the local market. Tencent were funded by Naspers, a South African company, so I think we're much more aware of them than most other countries. I've spoken with Koos Bekker, the CEO of Naspers, about Tencent years ago. He said that they work much faster than any US tech company he's every seen.
- oneweekwonder 13y ago
  I'm also aware that Naspers is developing a lot of content for WeChat, something in the line of channels you can subscribe to or something. I think you can compare it to what Mxit did(or tried to do) years ago, but at that time I believe the tech was not there yet. I also think they might have a gap in the African market. My gardener has a smart phone. He asks for mp3 and videos and I know he is on Whatsapp. But I don't see Whatsapp trying to supply content yet, might change in the near future with the facebook deal. If WeChat can get people like him on their platform and supply content to him for a small fee they have a very big market. Also I can see he is willing to spend money. I just wonder how willing is he to spend money on digital content. Btw, "Hallo" from a fellow South African.
- raverbashing 13y ago
  Startup News sites tend to live in a bubble where a "Coming Soon" page just hacked together by 2 guys in a cafe in SF is more important than a billion dollar business elsewhere.
  - gejjaxxita 13y ago
    That "Coming Soon" page can often provide more ideas and interesting discussion than the billion dollar business.
    - nnash 13y ago
nahname 13y ago
Google search for Tencent brings up this article. Not sure if I even found their real site.
- deleted 13y ago
  [deleted]
- yiedyie 13y ago
  I cannot reproduce this issue.
- malanj 13y ago
  It is: http://www.tencent.com/ http://www.tencent.com/
- doesnt_know 13y ago
  Really? I guess this means that this is the first time DuckDuckGo actually has more relevant search results then Google. http://i.imgur.com/HHngy0Q.png http://i.imgur.com/HHngy0Q.png (This comment is tongue in cheek. I use DDG as my main search engine but sometimes it can just be... frustrating.)
- johansch 13y ago
  The consumer-facing sites are: http://im.qq.com/ http://im.qq.com/ (Chinese) http://www.imqq.com/ http://www.imqq.com/ (International)
- Zarel 13y ago
  My best guess is that you accidentally searched Google News instead of the main Google search. The main Google search is giving me tencent.com as the first result and the Wikipedia article for Tencent as the second, followed by some news results including this article.
zhte415 13y ago
Tencent has been the elephant in the Global room for a long time. It sure took a long time to be recognised. It is also the elephant in China, in a very nice way. Its success being based in Southern China seems testament to this. vs Baidu for example.
logicchains 13y ago
As a QQ user I'd like to note that it seems quite superior feature-wise to MSN messenger, Gtalk, Facebook messenger and Skype IM. You can for instance paste multiple images straight into the input box and send them just like text, and it also has an extremely quick and easy to use screen capture feature. Not to mention a reliable, indexed message history, offline file transfers (you send it when the other person is offline, and when they sign in they'll be able to receive the file), and accurate notification whenever a message you send fails to be delivered. Note however that I'm referring to the International Version; the mainland Chinese version is less appealing, full of advertisements, and hides some features behind paywalls.
- est 13y ago
  you can't share full or partial screen like Skype in QQ.
  - logicchains 13y ago
    You can share screen via remote access, and optionally give the other person shared control over your mouse, but I suppose that's not quite the same.
- tiensi 13y ago
  I had to make a QQ account while I was studying abroad in Japan to play League of Legends. Needless to say I need to brush up on my mandarin.
LiweiZ 13y ago
I'm a native Chinese and started to use Tencent's products 15 years ago. I'm using wechat as well since almost every Chinese I want to connect with has a wechat account. Information based product, esp. with strong social context, is highly related with its user group. Even if every product in the narrowed domain is exactly the same. They evolve to different products later and may not a better fit for other user groups. And yes, the policy barrier set by the state is also a major reason to provide room to have some follower strategy products survive and grow strong. But market value is not a key indicator here. Money can not buy you anything, esp. in information industry, in which a lot of people know what a substitute product can do. Also, if you want to worry about Tencent, just try their products to see how polished they really are yourself. In case you are interested, Porter five forces analysis http://en.wikipedia.org/wiki/Porter_five_forces_analysis http://en.wikipedia.org/wiki/Porter_five_forces_analysis is a good framework and start to learn to have some idea of how to exam a market in a more logic way.
- notastartup 13y ago
  I'm not Chinese and have never heard of Tencent. I've heard of Facebook though. I think the fact that it's based solely in China and Chinese users would be a big barrier in being able to grow, as these social apps have a networking effect, in which case it works amongst Chinese but might have trouble with attracting non-Chinese speakers. just like if Brazil had their own popular app amongst themselves, it would have a hard time penetrating other countries.
  - lacero 13y ago
    I'm not Chinese and I'm not American. I have seen countless Tencent WeChat ads while watching tv and especially during Champions League football. I have never seen a Facebook ad on tv.
  - LiweiZ 13y ago
    I guess I did not make my comment above very straightforward. I actually meant the opposite side. Regard of Tencent, there is nothing FB needs to worry about.
ma2rten 13y ago
Tencent is an interesting company, but this article is complete bogus. Tencent has learnt how to penetrate overseas markets. In the online gaming industry, for instance, it has become a player by buying equity stakes in Riot Games for $400 million; Epic Games for $330 million; Activision Blizzard for $1.4 billion; So when tencent invests in a company, they are evidently "penetrating overseas markets", but if Facebook acquires a company to gain international market share it is a sign of their inability to build something themselves. Tencent enjoys the advantages of a giant social network as well as a history of innovation. It has repeatedly fought off competitors including messaging apps such as AOL Instant Messenger, Confide, Glide, GroupMe, iMessages, Instagram Direct, Kik Messenger, Line, Popcorn, Tango, MessageMe, Snapchat, Shots, Skype, Twitter direct messages, Telegram, TigerText, Viber, which Japan’s Rakuten recently bought for $900 million, Whisper, Wut, and ooVoo. What is this even talking about? This seems like a random list of apps which are vaguely related to messaging. TigerText for instance is an internal messaging app for enterprises. To me it seems like a rushed article that the author wrote because he had to meet some kind of quota.
- chiph 13y ago
  To me, it looked like he was doing this to promote his book. as I describe in a recently co-authored book,
notastartup 13y ago
If it's so big how come I've never heard of it but have of Facebook? It must be that outside of China and Chinese users, it's irrelevant. I honestly don't think Facebook has anything to fear unless the whole world became Chinese somehow. Personally, I don't want to use a service based in a communist country, NSA would be lesser of the two evils.
- mkempe 13y ago
  It may help to consider a wider context. More than 95% of the world population lives outside of the USA. How do they feel about using the services of American companies and the NSA?
- bsaul 13y ago
  I don't get why this comment was downvoted. I find the fact that china is probably monitoring communications and data much more systematically than any other country ( because they are proficient technologicaly and a single-party country), a very good reason why people in general wouldn't want to use their service. I would add to this comment that chinese themselves may very well prefer to use US services, because they may very well be the first target, should they decide to have different political views about their country.

61 points by arnauddri 13y ago

Asia is a region which has proven its ability to innovate in the messaging space and the internet as a whole. I believe Rakuten and Alibaba (through their investment in Tango and Viber) along with Tencent are now ready to compete with US juggernauts like FB

yiedyie 13y ago
Facebook peaked they should be worried about everything.
- arnauddri 13y ago
  agreed - they're venturing into the hardware business with Oculus, something very few companies managed to do properly
w1ntermute 13y ago
I don't think that Asia has proven its ability to innovate in the internet/messaging space. It's that significant cultural, language, and (in the case of China) legal barriers make it hard for Western companies to compete there. But at the same time, almost none of these companies have shown the potential to expand outside of Asia, and the vast majority of them have not even been able to expand out of their home countries. Rakuten has tried to grow in the US market using its purchase of Buy.com, but that's not working, partly due to a disastrous rebranding. They also had a failed venture in China. So Viber may be successful if they just leave it alone, but trying to use it to make Rakuten better known in the West would be a horrible idea. Naver (Korean) has the Japanese messaging service LINE (which was created by some of its Japanese employees at its Japanese subsidiary), but can't gain any other ground. And I definitely can't see the Chinese internet companies becoming successful in Japan or South Korea, given their penchant for censorship and nationalistic differences.
- arnauddri 13y ago
  Your point on Rakuten is fair. However I believe Chinese companies have a strong edge regarding the messaging market. Chinese users are much more early adopters when it comes to messaging apps which enable Alibaba or Tencent to test new ideas much faster. Now that competition is getting fierce in China, they are expanding aggressively elsewhere and thus bring their deep expertise in the messaging market to the US. Tango's CTO Eric Setton just got $250M from Alibaba praised this strategic move saying that tapping into Alibaba will “bring a crystal ball into (their) boardroom… Asia has insight that is around a year ahead of the West right now” (http://thenextweb.com/mobile/2014/03/20/chat-app-tango-raises-a-280m-mega-round-led-by-alibaba-as-it-reaches-70m-active-users/ http://thenextweb.com/mobile/2014/03/20/chat-app-tango-raise...)
  - adventured 13y ago
    Saying things like: "Asia has insight that is around a year ahead of the west" does not actually make it so. That sounds like nothing more than empty talk. What stunning software products / innovations / market leaders came out of Asia in the last decade that didn't exist in the West or Silicon Valley either beforehand or at roughly the same time?
- danford 13y ago
  Of course it could just be that it's just hard to have a globally successful app, but consider the following: China has their own social networks and messaging apps because they're sponsored (openly or behind closed doors) by the state. The reason they allow their citizens to use these apps is because these particular ones are being used to intercept intelligence data, and are not controlled by western entities. Does the chinese government have a hook in face book? If they did, would they want the US intelligence agencies who are undoubtedly closer to FB to have access to their citizens data? Probably not. Just as Chinese intelligence agencies control the net over there, US and western intelligence agencies control the internet over here, but in a much more secretive way as we've seen with the recent snowden leaks. The reason Chinese services aren't successful in the west is because the powers that be don't want them to be successful, because then the west wouldn't have the proper hooks in the Chinese social networks which are undoubtedly used for mass spying.

malanj 13y ago

As a South African I find the global indifference to Tencent quite strange. They are massive but mostly ignored (compared to e.g. Amazon which has a similar market cap). Tencent are aggressively expanding WeChat into Africa (big billboards everywhere!). They are also running a local development team in South Africa to customise the app for the local market. Tencent were funded by Naspers, a South African company, so I think we're much more aware of them than most other countries. I've spoken with Koos Bekker, the CEO of Naspers, about Tencent years ago. He said that they work much faster than any US tech company he's every seen.

oneweekwonder 13y ago
I'm also aware that Naspers is developing a lot of content for WeChat, something in the line of channels you can subscribe to or something. I think you can compare it to what Mxit did(or tried to do) years ago, but at that time I believe the tech was not there yet. I also think they might have a gap in the African market. My gardener has a smart phone. He asks for mp3 and videos and I know he is on Whatsapp. But I don't see Whatsapp trying to supply content yet, might change in the near future with the facebook deal. If WeChat can get people like him on their platform and supply content to him for a small fee they have a very big market. Also I can see he is willing to spend money. I just wonder how willing is he to spend money on digital content. Btw, "Hallo" from a fellow South African.
raverbashing 13y ago
Startup News sites tend to live in a bubble where a "Coming Soon" page just hacked together by 2 guys in a cafe in SF is more important than a billion dollar business elsewhere.
- gejjaxxita 13y ago
  That "Coming Soon" page can often provide more ideas and interesting discussion than the billion dollar business.
  - nnash 13y ago

nahname 13y ago

Google search for Tencent brings up this article. Not sure if I even found their real site.

deleted 13y ago
[deleted]
yiedyie 13y ago
I cannot reproduce this issue.
malanj 13y ago
It is: http://www.tencent.com/ http://www.tencent.com/
doesnt_know 13y ago
Really? I guess this means that this is the first time DuckDuckGo actually has more relevant search results then Google. http://i.imgur.com/HHngy0Q.png http://i.imgur.com/HHngy0Q.png (This comment is tongue in cheek. I use DDG as my main search engine but sometimes it can just be... frustrating.)
johansch 13y ago
The consumer-facing sites are: http://im.qq.com/ http://im.qq.com/ (Chinese) http://www.imqq.com/ http://www.imqq.com/ (International)
Zarel 13y ago
My best guess is that you accidentally searched Google News instead of the main Google search. The main Google search is giving me tencent.com as the first result and the Wikipedia article for Tencent as the second, followed by some news results including this article.

zhte415 13y ago

Tencent has been the elephant in the Global room for a long time. It sure took a long time to be recognised. It is also the elephant in China, in a very nice way. Its success being based in Southern China seems testament to this. vs Baidu for example.

logicchains 13y ago

As a QQ user I'd like to note that it seems quite superior feature-wise to MSN messenger, Gtalk, Facebook messenger and Skype IM. You can for instance paste multiple images straight into the input box and send them just like text, and it also has an extremely quick and easy to use screen capture feature. Not to mention a reliable, indexed message history, offline file transfers (you send it when the other person is offline, and when they sign in they'll be able to receive the file), and accurate notification whenever a message you send fails to be delivered. Note however that I'm referring to the International Version; the mainland Chinese version is less appealing, full of advertisements, and hides some features behind paywalls.

est 13y ago
you can't share full or partial screen like Skype in QQ.
- logicchains 13y ago
  You can share screen via remote access, and optionally give the other person shared control over your mouse, but I suppose that's not quite the same.
tiensi 13y ago
I had to make a QQ account while I was studying abroad in Japan to play League of Legends. Needless to say I need to brush up on my mandarin.

LiweiZ 13y ago

I'm a native Chinese and started to use Tencent's products 15 years ago. I'm using wechat as well since almost every Chinese I want to connect with has a wechat account. Information based product, esp. with strong social context, is highly related with its user group. Even if every product in the narrowed domain is exactly the same. They evolve to different products later and may not a better fit for other user groups. And yes, the policy barrier set by the state is also a major reason to provide room to have some follower strategy products survive and grow strong. But market value is not a key indicator here. Money can not buy you anything, esp. in information industry, in which a lot of people know what a substitute product can do. Also, if you want to worry about Tencent, just try their products to see how polished they really are yourself. In case you are interested, Porter five forces analysis http://en.wikipedia.org/wiki/Porter_five_forces_analysis http://en.wikipedia.org/wiki/Porter_five_forces_analysis is a good framework and start to learn to have some idea of how to exam a market in a more logic way.

notastartup 13y ago
I'm not Chinese and have never heard of Tencent. I've heard of Facebook though. I think the fact that it's based solely in China and Chinese users would be a big barrier in being able to grow, as these social apps have a networking effect, in which case it works amongst Chinese but might have trouble with attracting non-Chinese speakers. just like if Brazil had their own popular app amongst themselves, it would have a hard time penetrating other countries.
- lacero 13y ago
  I'm not Chinese and I'm not American. I have seen countless Tencent WeChat ads while watching tv and especially during Champions League football. I have never seen a Facebook ad on tv.
- LiweiZ 13y ago
  I guess I did not make my comment above very straightforward. I actually meant the opposite side. Regard of Tencent, there is nothing FB needs to worry about.

ma2rten 13y ago

Tencent is an interesting company, but this article is complete bogus. Tencent has learnt how to penetrate overseas markets. In the online gaming industry, for instance, it has become a player by buying equity stakes in Riot Games for $400 million; Epic Games for $330 million; Activision Blizzard for $1.4 billion; So when tencent invests in a company, they are evidently "penetrating overseas markets", but if Facebook acquires a company to gain international market share it is a sign of their inability to build something themselves. Tencent enjoys the advantages of a giant social network as well as a history of innovation. It has repeatedly fought off competitors including messaging apps such as AOL Instant Messenger, Confide, Glide, GroupMe, iMessages, Instagram Direct, Kik Messenger, Line, Popcorn, Tango, MessageMe, Snapchat, Shots, Skype, Twitter direct messages, Telegram, TigerText, Viber, which Japan’s Rakuten recently bought for $900 million, Whisper, Wut, and ooVoo. What is this even talking about? This seems like a random list of apps which are vaguely related to messaging. TigerText for instance is an internal messaging app for enterprises. To me it seems like a rushed article that the author wrote because he had to meet some kind of quota.

chiph 13y ago
To me, it looked like he was doing this to promote his book. as I describe in a recently co-authored book,

notastartup 13y ago

If it's so big how come I've never heard of it but have of Facebook? It must be that outside of China and Chinese users, it's irrelevant. I honestly don't think Facebook has anything to fear unless the whole world became Chinese somehow. Personally, I don't want to use a service based in a communist country, NSA would be lesser of the two evils.

mkempe 13y ago
It may help to consider a wider context. More than 95% of the world population lives outside of the USA. How do they feel about using the services of American companies and the NSA?
bsaul 13y ago
I don't get why this comment was downvoted. I find the fact that china is probably monitoring communications and data much more systematically than any other country ( because they are proficient technologicaly and a single-party country), a very good reason why people in general wouldn't want to use their service. I would add to this comment that chinese themselves may very well prefer to use US services, because they may very well be the first target, should they decide to have different political views about their country.